Automotive News Canada - December 2022 - S5

BEST PRACTICES 2022
5
ers will likely continue to encounter
monthslong waits for popular models
for at least another year.
It will be " well into next year, if not
2024, " before the situation eases, said
Sam Fiorani, vice-president of global
vehicle forecasting at U.S.-based
AutoForecast Solutions. His view is
echoed by John Bardwell, a Torontobased
automotive product strategist
with Bond Brand Loyalty.
" I don't see a return to regular semiconductor
production
until late 2024, "
Bardwell said. " I can't
see anyone having a
clear advantage now. "
It's not just microchips,
Fiorani said.
" The supply issue is
broad-based. We need
to get the chip crisis
solved, but then it's
also wiring harnesses
from Eastern Europe
and foam and plastics,
which are made from
petroleum products. "
" I don't wish to be
glum, " said Bardwell,
" but at the end of this,
we'll wish [the supply
of] semiconductors
was our only problem. "
Bardwell:
" At
the end
of this, we'll
wish [the
supply of]
semiconductors
was
our only
problem. "
SUPPLIED
PHOTO
NO SUPPLY, NO SALES
The supply crunch
is being blamed for an
8.5-per-cent sales drop
in May compared
with the same period
last year, according
to DesRosiers
Automotive
Consultants.
" Worryingly, the
[seasonally adjusted
annual rate] has continued
to fall each
While Hyundai globally purchased
a supply of microchips last fall, " that
only goes so far, " he said. " Now we're
fighting for every chip we can get.
We're in the same boat as everyone
else. "
Hyundai and its sibling brand, Kia,
were among the automakers that did
not scale back microchip orders during
the early stages of the pandemic. But
Hyundai's supply of chips is running
thin, forcing the company to cut production,
as other automakers have
already done, said Bardwell.
Romano said: " We had a hurry-up
offence [initially by not cutting back
the purchase of microchips], but we're
not immune to the lack of chips. "
SLOW SELLERS AREN'T SO SLOW
The irony of the current market
is that vehicles that aren't typically
strong sellers are doing well because
buyers will grab whatever they can
get, Romano said.
" I believe our supply is well below
our natural demand, " he said, referring
to times when supply chains were
healthy.
Kia Canada has temporarily
stopped accepting new orders for
certain vehicles, including the new
Carnival minivan, said Andrej Kljajic,
general manager of Gus Revenberg
Kia in Windsor, Ont. Instead, potential
customers are placed on a waiting list
and contacted once the dealership can
resume submitting orders to the automaker,
he said.
Romano:
Hyundai was
ahead of the
microchip
shortage, but,
" Now we're
fighting for
every chip we
can get. "
FILE PHOTO
month throughout 2022, from 1.67 million
in January to 1.36 million in May,
indicating that the market supply situation
appears to be getting worse, "
DesRosiers said in a statement.
At Hyundai Canada, a day doesn't
go by that CEO Don Romano doesn't
receive 10 to 20 calls from dealers
searching for vehicles.
" These are tough times overall for
the distribution system, " he said.
Hyundai's customers face average
wait times of six to eight months for
electric vehicles, four to five months for
utility vehicles and one to two months
for sedans, Romano said.
The list of affected vehicles has
changed over the past several months,
Kljajic said.
Kia Canada said it expects inventory
levels to improve by the second half
of the year and it's working to reduce
" wait times during what is a very fluid
situation due to the global chip shortage. "
" To
best manage customer expectations
and honour delivery times
for specific models, dealers may temporarily
pause orders on specific
models until the inventory situation
improves, " the company said in an
email.
Toyota also reported that it had a
six-month supply of chips last fall -
now diminished.
In February, Ford Motor Co.
announced that it was cutting production
of the F-150 pickup, Mustang
Mach-E, Bronco SUV and several other
vehicles because of the chip shortage.
" When you have vehicles like the
F-150 and [Chevrolet] Silverado being
affected, you know you have a problem, "
Fiorani said. " These are profitable
vehicles. "
Some vehicles have been assembled
but are being stored while they
await vital microchips, said Bardwell.
Others are being delivered with nonessential
functions - such as heated
seats and power door locks - nonoperational,
he said. The promise is that
they will be upgraded when the parts
become available, Bardwell said.
VEHICLE FUNCTIONS SACRIFICED
Other vehicles are being delivered
without some functions, such as
fuel-saving cylinder deactivation and
stop-start, Fiorani said. For those functions,
he said, no plans are in place to
restore them at a later date.
The more popular the vehicle, the
longer the wait time for customers. At
Rallye Motors Hyundai in Moncton,
N.B., staff are telling
customers to be
prepared to wait up
to two years for the
new Ioniq 5 EV, said
Mike Raby, director of
sales.
Hyundai Canada
CEO Romano says the
actual wait is less.
" They may need
to wait for the next
model year on some
models, but not two
years. "
Many customers
are willing to wait for
Wyant: " You
haven't been
able to buy a
Super Duty
off a Ford lot
for two years
now. "
FILE PHOTO
their preferred vehicle, Bardwell said,
but if they need a vehicle immediately
- for example, to replace one involved
in a crash - they take whatever they
can get, often from any brand, he said.
If a lot has new stock, it's usually
just " a handful of vehicles, " said
Michael Wyant, COO of the Wyant
Group, which owns 29 locations in
Saskatchewan, Alberta and British
Columbia.
" You can [buy off the lot] in certain
model lines, " Wyant said. " There's
other lines where [for example] you
haven't been able to buy a Super Duty
off a Ford lot for two years now. "
Consumers appear to be resigned
to the new normal, said UpAuto's
Carmichael.
" No one's asking for a discount, " he
said. " They're recognizing these delays
in other parts of their lives. It's part
of the world we live in. Everything is
delayed. " - ANC
- With files from Grace Macaluso
and Greg Layson
Automotive News Canada - December 2022

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